Who benefits the most from post-secondary schooling?

Who benefits the most from post-secondary schooling?: A cross-national comparison of selection and the economic returns to post-secondary education is a British Academy funded project looking at the effect of a college or university degree on workers’ earnings, comparing the wage gains for post-secondary graduates across four countries – United States, United Kingdom and Germany.

Using sophisticated statistical techniques that allow the comparison between closely matched workers with and without a post-secondary degree the research team hopes to shed light on what policies help workers gain the most from their training, and which do not.

The project aims to explore the worth of a university or college degree and will ask if all students stand to gain the same benefits from higher education in terms of their future earnings, or whether some students gain more than others. It will also ask how differences in education and labour market policy impact the returns on investments in higher education.

Background

Given a limited amount of resources and the prospect of an extended recession, it is critical to understand what is gained from the investments in post secondary education by both individuals and the state. Recent research in the US found that students who attend college actually have less to gain from a college degree than those who do not attend (Brand and Xie 2010). Whether this mismatch in educational opportunity holds in countries with less expensive, but more selective higher education systems, is a central question of the research project.

The three country cases are chosen to represent Esping-Anderson’s (1990;1999) different “types” of welfare capitalism: The UK and the US represent “liberal” welfare state regimes, Germany represents the “corporatist-statist” regime.

The educational characteristics of institutions in the four countries vary widely in respect of availability of vocational options, cost/tuition fees, processes for tracking and monitoring progress, governmental context etc. and the researchers anticipate this variation should lead to different returns to post-secondary education. For example, these countries differ in the availability of academic and vocational post-secondary training, costs of post-secondary training, level of tracking in secondary schooling, and tightness of linkages between education and occupations.

Data and methods

Making use of panel data sources with substantial overlap in design and time period, and looking at men only, the project explores the economic returns to completing post-secondary education and compares those returns in three countries: the United States, the United Kingdom and Germany.

What the researchers will do

They will compare the relationship between the propensity to attend higher education and the economic returns to higher education. They will also compare the returns to post-secondary vocational training higher education: vocational vs. academic training.

There will be a further comparison of the role of post-secondary education in income intergenerational mobility, the findings from which could have strong implications for future stratification and demographic trends.